Good evening everyone,
we registered in the forum today and are just starting our house building plans. We live in Bremen and want to build in the surrounding area.
Today, we had an appointment with an independent financial advisor who also financed my brother’s house and previously my parents’ house. I have just finished my studies, and we now have a total net income of about 3650 € (approximately $3850). We are both 29 years old – I completed vocational training and gained work experience before my studies.
I was mainly there because I am, of course, aware of the unusual interest rate situation and wanted to ask whether we should save to build equity or rather take advantage of the low interest rates. The answer was clear in this case: with 20,000 € (about $21,000) in equity, we can easily get a construction loan for 220,000 € (around $231,000). The interest rate situation is exceptionally favorable. The portion from the KfW loan would be 100,000 € (about $105,000). The effective interest rate for both loans combined would be 2.79%. The KfW loan would be repaid at 4.35%, and the bank loan (120,000 € / $126,000) initially only at 1%. The fixed-rate period is 10 years at first.
The monthly payment would be 958.31 € (approximately $1005).
This seems manageable monthly and exceptionally affordable to me.
Of course, the conversation was just for information, as all further steps (house type, construction company, land plot, etc.) still have to be reviewed and clarified to determine the actual financing needs.
My question is simply whether we actually received a good (non-binding) offer and whether you also think it makes sense in our situation to start building sooner rather than later, despite the low equity share?
Thank you very much.
we registered in the forum today and are just starting our house building plans. We live in Bremen and want to build in the surrounding area.
Today, we had an appointment with an independent financial advisor who also financed my brother’s house and previously my parents’ house. I have just finished my studies, and we now have a total net income of about 3650 € (approximately $3850). We are both 29 years old – I completed vocational training and gained work experience before my studies.
I was mainly there because I am, of course, aware of the unusual interest rate situation and wanted to ask whether we should save to build equity or rather take advantage of the low interest rates. The answer was clear in this case: with 20,000 € (about $21,000) in equity, we can easily get a construction loan for 220,000 € (around $231,000). The interest rate situation is exceptionally favorable. The portion from the KfW loan would be 100,000 € (about $105,000). The effective interest rate for both loans combined would be 2.79%. The KfW loan would be repaid at 4.35%, and the bank loan (120,000 € / $126,000) initially only at 1%. The fixed-rate period is 10 years at first.
The monthly payment would be 958.31 € (approximately $1005).
This seems manageable monthly and exceptionally affordable to me.
Of course, the conversation was just for information, as all further steps (house type, construction company, land plot, etc.) still have to be reviewed and clarified to determine the actual financing needs.
My question is simply whether we actually received a good (non-binding) offer and whether you also think it makes sense in our situation to start building sooner rather than later, despite the low equity share?
Thank you very much.
T
Tipps gierige15 May 2012 01:14Hello,
we also live in a rural area, and I can tell you that 220,000 € will be very challenging, but it is still possible.
We have also reserved a plot of land for 51,000 €. The additional construction costs for the foundation slab will be around 30,000 €, and a nearby builder even needed only 25,000 €. If you then find a house supplier who builds for 140,000 €, you will have total costs of 221,000 €.
The problem is, if you want something good for your money, you have to spend at least 150,000 € on the solid house—that’s just how it is in our area.
Best regards
we also live in a rural area, and I can tell you that 220,000 € will be very challenging, but it is still possible.
We have also reserved a plot of land for 51,000 €. The additional construction costs for the foundation slab will be around 30,000 €, and a nearby builder even needed only 25,000 €. If you then find a house supplier who builds for 140,000 €, you will have total costs of 221,000 €.
The problem is, if you want something good for your money, you have to spend at least 150,000 € on the solid house—that’s just how it is in our area.
Best regards
Experience-Based Estimates for Additional Costs/Incidental Costs
Hi,
As promised, I wanted to get back to you after we have calmly reviewed plots of land, house types, financing options, etc.
Here’s what has happened:
We can now plan with about €50,000 (approximately $54,000) in personal funds. A beautifully shaped plot of 700 sqm (7,535 sq ft), located south of Bremen, would cost us €65,000 (about $70,000), fully serviced, purchased privately.
The house type we have in mind, with 142 sqm (1,527 sq ft) of net living space, KfW 70 standard, and corresponding extra features, would be priced at €175,000 (around $189,000) (we removed the bathrooms since my father-in-law will do those himself). The developer has been in business for over 100 years and is financially stable, according to Creditreform. The kitchen we envision would cost an additional €15,000 (about $16,000).
The perhaps somewhat general question I have:
Based on your experience, what amount would you add on top of these three sums to have a reliable buffer for incidental costs, additional expenses, etc.?
Our current plan is to use €50,000 (about $54,000) in personal funds plus a €240,000 (around $260,000) loan.
Best regards and have a nice weekend
Hi,
As promised, I wanted to get back to you after we have calmly reviewed plots of land, house types, financing options, etc.
Here’s what has happened:
We can now plan with about €50,000 (approximately $54,000) in personal funds. A beautifully shaped plot of 700 sqm (7,535 sq ft), located south of Bremen, would cost us €65,000 (about $70,000), fully serviced, purchased privately.
The house type we have in mind, with 142 sqm (1,527 sq ft) of net living space, KfW 70 standard, and corresponding extra features, would be priced at €175,000 (around $189,000) (we removed the bathrooms since my father-in-law will do those himself). The developer has been in business for over 100 years and is financially stable, according to Creditreform. The kitchen we envision would cost an additional €15,000 (about $16,000).
The perhaps somewhat general question I have:
Based on your experience, what amount would you add on top of these three sums to have a reliable buffer for incidental costs, additional expenses, etc.?
Our current plan is to use €50,000 (about $54,000) in personal funds plus a €240,000 (around $260,000) loan.
Best regards and have a nice weekend
Here is a brief summary from my side about how our other discussions went:
The general consensus was that building in northwest Germany is significantly more affordable than in many other parts of the country—both in terms of land prices and construction costs. It’s hard to judge exactly, but it is certainly cheaper than in western and southern Germany, although incomes tend to be higher there as well.
Most of the building contractors first focused on additional construction costs, which went quite well overall. I had the tips and information from the forum in mind. All contractors estimated the additional costs, excluding the kitchen, quite generously at around €20,000 to €25,000 (foundation costs, connections, etc.). We were told that these additional costs can be estimated fairly accurately because the land or neighboring plots are well known and can be assessed (how reliable this statement is, I find difficult to judge).
Of course, there were differences in the services included in the offered prices. KfW 70 energy-efficient houses with solar panels and ventilation system, triple-glazed windows (without going into brands), 142 m² (1527 sq ft) of net living area, underfloor heating, electric roller shutters, staircase as desired, fully wallpapered, floor tiles downstairs as desired, carpeting upstairs except for the children’s room, electrical outlets and wiring customized, carport, etc.—we mostly ended up with pricing around €175,000 to €190,000. Additionally, a reserve of €5,000 to €10,000 was recommended.
This is just a rough summary, but perhaps it helps some of you.
The general consensus was that building in northwest Germany is significantly more affordable than in many other parts of the country—both in terms of land prices and construction costs. It’s hard to judge exactly, but it is certainly cheaper than in western and southern Germany, although incomes tend to be higher there as well.
Most of the building contractors first focused on additional construction costs, which went quite well overall. I had the tips and information from the forum in mind. All contractors estimated the additional costs, excluding the kitchen, quite generously at around €20,000 to €25,000 (foundation costs, connections, etc.). We were told that these additional costs can be estimated fairly accurately because the land or neighboring plots are well known and can be assessed (how reliable this statement is, I find difficult to judge).
Of course, there were differences in the services included in the offered prices. KfW 70 energy-efficient houses with solar panels and ventilation system, triple-glazed windows (without going into brands), 142 m² (1527 sq ft) of net living area, underfloor heating, electric roller shutters, staircase as desired, fully wallpapered, floor tiles downstairs as desired, carpeting upstairs except for the children’s room, electrical outlets and wiring customized, carport, etc.—we mostly ended up with pricing around €175,000 to €190,000. Additionally, a reserve of €5,000 to €10,000 was recommended.
This is just a rough summary, but perhaps it helps some of you.
And a quick update:
We have narrowed down our choice to two suppliers and will soon have their offers reviewed by a building expert well known in this forum.
Where we currently stand (before the review):
Equipment as mentioned earlier plus a few additional extras – €200,000 (approx. $215,000) excluding carport/garage.
Our calculation with our financial advisor is as follows:
House: €200,000 (approx. $215,000)
Land including additional costs: €69,000 (approx. $74,000)
Additional costs (connections, groundwork, etc.): €20,000 (approx. $21,500)
Kitchen: €18,000 (approx. $19,300)
Reserve for selection of finishes: €10,000 (approx. $10,750)
Effective interest rate for a loan of €250,000 (approx. $269,000) over 20 years = 3.25%
Just for those interested. Comments, including on the interest rate, are always welcome.
We have narrowed down our choice to two suppliers and will soon have their offers reviewed by a building expert well known in this forum.
Where we currently stand (before the review):
Equipment as mentioned earlier plus a few additional extras – €200,000 (approx. $215,000) excluding carport/garage.
Our calculation with our financial advisor is as follows:
House: €200,000 (approx. $215,000)
Land including additional costs: €69,000 (approx. $74,000)
Additional costs (connections, groundwork, etc.): €20,000 (approx. $21,500)
Kitchen: €18,000 (approx. $19,300)
Reserve for selection of finishes: €10,000 (approx. $10,750)
Effective interest rate for a loan of €250,000 (approx. $269,000) over 20 years = 3.25%
Just for those interested. Comments, including on the interest rate, are always welcome.